Tuesday, November 29, 2011

As I have repeatedly observed, it is puzzling that for more than nine decades, two of the largest multi-national public companies in the world (by revenue) haven't done more to "re-brand" their identities -- in ways which would help distinguish the one, from the other.

Now, it seems that a 21st Century phenomenom will do it for them. Overnight, Facebook's administrators disabled the "/Merck" vanity URL -- citing the spat between Merck KGaA (Germany) and Merck & Co. (United States), as to which concern may properly claim the name -- and thus, the vanity URL on Facebook.

1.You will not post content or take any action on Facebook that infringes or violates someone else's rights or otherwise violates the law.

2. We can remove any content or information you post on Facebook if we believe that it violates this Statement. . . .

III. Application Content. . . .

B. Prohibited Content | You agree that you will not promote, or provide content referencing, facilitating, containing or using, the following. . .

2.Content that infringes upon the rights of any third party, including intellectual property rights, privacy, publicity, moral or other personal or proprietary right, or that is deceptive or fraudulent. . . .

C. Rights to Content

1.You must ensure that you own or have secured all rights necessary to copy, display, distribute, deliver, render and publicly perform all content of or within your application to Facebook users in all countries where you make the content available. . . .

It now seems pretty plain that US Merck didn't have those rights -- as to the "/Merck" vanity URL. Especially not if Merck US (allegedly) claim-jumped the right to the vanity URL, from the German entity. [There is essentially zero chance that Facebook spontaneously changed the passwords for Admin access (passwords originally granted only to Merck KGaA Germany), without some affirmative representations and showings (which, must have been, at least, less than completely truthful) from someone connected to Merck & Co. US, here -- let's be honest, now -- we all know how Facebook "support" is anything but.]

So -- given that Merck & Co. was just exactly one week ago telling the world about its newly renegotiated "Corporate Integrity Agreement" (after another DoJ plea deal -- costing $950 million of the stockholders' money, just this time -- and over $6 billion, overall!), it is time for Merck & Co. to immediately and voluntarily identify the employees or contractors involved in convincing Facebook's staffers to hand over the keys (either by omission of relevant information, or outright deceptive representations to said Facebook staffers) to Merck KGaA's vanity Facebook URL sometime back in October 2011.

While Merck US may well argue it has the right to the Merck name in various geographies, it can no longer credibly claim that it -- as an organization -- thinks its conduct in obtaining the vanity URL was lawful, vis-a-vis Merck KGaA's open, notorious (and most importantly) prior (since early 2010) rights to that URL. [Here recall that back then, in 2010, Merck & Co. (US) was largely forsaking social media applications, on regulatory entanglement concerns.] In short, it was shying away, at a time when German Merck was deciding to move forward, aggressively. Merck US cannot reclaim that lost ground, and especially not so now by (alleged) subterfuge.

It is time for CEO Frazier to act on his new transparency: Name the names, Mr. Frazier -- don't make Merck KGaA litigate in New York to get them.

5 comments:

Anonymous
said...

What will getting the name(s) of the Merckies who may have strong armed FB into giving them page rights do? I'm not trying to be a jerk, I'm just curious. It's clear that it would have had to be someone from Merck US who called on FB to get the access and that FB should not have given it - but they did.

Am I surprised that Merck US would hijack Merck Germany's page? Absolutely not. Since this took place back in 10/2011, chances are good that the person(s) directly engaged with FB on the matter are gone. There have been massive layoffs during the interim and Corporate Communications, the shared service responsible for this type of thing, was gutted just after that time. Their 60-day WARN period is up in just the next week or so.

So clamor for names if you like, what it will reveal, other than Merck believes it operates above the rules yet again, I'm really not sure. I am sure that it would stymie the chances of said people to find a new job.

Here's why I think it matters. First, Merck (US) could make a defense -- especially if the involved parties have been restructured out, already (as you posit) -- that whatever was done, was outside the scope of their employment with Merck (US). It was, in short, a Palin-esque "rogue" campaign.

In that case, by outing the names, and allowing German Merck to pursue the (alleged) malfeasors personally, Merck US is very-likely off the hook for damages for misappropriation of intellectual property (see ensuing paragraphs).

Alternatively, in the event that Merck US takes the position that the acts were "within scope of employment" -- and "authorized" -- by senior management (by hiding the names from German Merck), then Merck KGaA probably will be able to at least plead a case to recover damages from Merck US, as a matter of corporate law.

Remember, we aren't talking about two teenagers arguing over a garage-band-fan page. There are likely some very-readily available, and significant stat-logs -- of Facebook-referred visits -- to the Merck KGaA site, by customers, doctors and patients, prior to October 2011.

The decrease in visits (likely a cliff-fall, in those same stat-logs) -- from Facebook referrals, now usurped by Merck & Co. (US) -- makes out a claim of "misappropriated" commercial relationships, and valuable intellectual property. Property Merck KGaA contracted with Facebook in 2010, to procure, on an exclusive basis.

Thus Merck US might also be liable for intentional interference with German Merck's contractual relationships (i.e., with Facebook).

So -- if CEO/Chairman Ken Frazier wants to end this cleanly, and quickly -- he will name the names (at least privately, to Merck KGaA's lawyers at Baker & Hostetler, LLP).

In sum, see no percentage in Frazier's arguing that Merck US had the right to "squat" on the Facebook page vanity URL -- because then (as you point out) Merck US once again looks the bully, or at least the oaf.

"Conduct unbecoming" a company that claims it is all about saving lives, right?

Unless Frazier is far less sophisticated about online social media than I suspect he is, he will cut a deal with German Merck to provide the names, and let German Merck have the vanity address -- perhaps with the negotiated trade-out, toward the top of the page, something like "Looking for US Merck?" (then click here!). . .

Clearly, as Facebook itself has admitted, Facebook made a mistake. On that, I think we might all agree.

But I am interested in how Facebook came to make that mistake -- how was it induced to do so?

Let us then make out the case most favorable to "mistake" -- on the part of Merck & Co. (US). Is it possible that no one at Merck US bothered to check whether the Facebook vanity page URL "www.facebook.com/Merck" was available, before (entirely innocently!) asking Facebook to open a page in Merck & Co. US's name? I guess that could have happened. . . .

But wouldn't it seem more likely that Facebook told Merck US that the page "already existed" -- Facebok, of course, assuming naively, and incorrectly, that Merck KGaA (Germany) was just an international affiliate of US Merck?

[Most people who hadn't recently read the 1919 Treaty of Versailles might have made the same assumption -- in fact no less an authority than the Wall Street Journal still occasionally does -- HAH! But we must assume that at US Merck's Corporate Communications Department, at least, it knows who it is -- and is NOT, right?]

In any event, wouldn't it also then seem likely that Merck US would simply say Oops! -- "we lost our passwords" -- or some such, and induce Facebook to reset the page, effectively "handing over the keys" to that address, to US Merck?

In sum, what I find hard to believe about this scenario (from US Merck's perspective) is that US Merck didn't even know that German Merck had the Vanity Facebook page address.

If Merck US did know about the German Merck vanity page, it becomes nearly impossible to imagine any set of statements that would be completely truthful -- and free from material omissions -- that would still result in Facebook handing over the keys to US Merck.

Certainly, Facebook (just as in the Salman Rushdie name case -- see link below) would require some evidence that Merck US and German Merck were essentially the same person before resetting the passwords, right?

I mean, think about it -- at almost same time, Facebook was very publicly handling the flap over Rushdie's own "pen" name. [In that case, Facebook required the submission of Rusdie's passport, among other things, before returning to him HIS OWN "PEN" NAME(!).]

Something similar must have been requested of Merck US. And short of a misstatement, the change wouldn't have occurred, in my estimation. That misstatement almost certainly came from Whitehouse Station (i.e., Merck US), in my estimation.

So -- yes, Facebook could very well have made a fairly innocent mistake (and has admitted as much).

If you can, though -- do lay out a plausible competing scenario -- one in which the second largest purveyor of drugs in the world is unaware of the German Merck's existence on Facebook, and is unaware of 92 years of its own confused history with that unaffiliated World War I reparations-seized-entity.

Remember, prior to the Summer of 2011, US Merck already had a page on Facebook -- just not a vanity URL address page. So too, did German Merck, but it ALSO had the vanity address page -- since 2010.

Senator Grassley's Concern

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